While the Chinese government takes measures to regulate the crypto industry, traders find the solution via OTC (over-the-counter) desks.
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As reported by Bloomberg, after China announced the latest crackdown, there has been a huge uptick in OTC service usage.Trading crypto isn't allowed in the country according to the ban adopted in 2019. However, the Chinese government made the regulations stricter forbidding financial institutions to provide crypto-related services and reiterating the BTC mining crackdown. Police in Beijing distributed warnings concerning crypto activities.
OTC desks allow the decentralized exchange of stocks, currencies, and other financial means without intermediaries. This method of P2P transactions is hard to track by authorities and suggests an alternative way of trading crypto in terms of the ban.
OTC trading is managed by two phases. The first one occurs on OTC platforms carried out by companies including Huobi and OKEx. They enable post bids and offers. After parties agree on a price, the buyer will use separate payments platform to send yuan to the seller. Then, digital coins, kept in escrow are transferred to the buyer.
Often regulatory bodies have no way to link one step to another.